TREASURY

Consolidated Statement (EU Funds)

Ian Pearson: The Government announced to the House of Commons in November 2006 that, as part of its work to improve the accountability of EU funds, HM Treasury would prepare an annual consolidated statement on the use of funds from the budget of the European Communities (EU funds) in the United Kingdom. In line with this commitment, we are today laying before Parliament the second of these statements for the year ending 31 March 2008, along with the Comptroller and Auditor General's (C&AG) audit opinion and report.
	Our aim is to strengthen the audit and Parliamentary scrutiny of the UK's use of EU funds, which will help detect any weaknesses in the UK's management of these funds so that they can be effectively and rapidly tackled.
	The C&AG's positive opinion on regularity clearly shows that the management of EU funds by UK authorities during the period covered by the statement has been sound, and that there has been no evidence of material irregularity in the payments made to beneficiaries. The Government welcome this finding.
	The C&AG'S opinion is that this is true and fair except for debtor, creditor, cash balances and the treatment of provisions. It is clear therefore that more needs to be done to improve the consistency with which EU funds are accounted for and recorded across the UK. The Government continue to work to ensure these accounting issues are addressed. Being able to make this type of improvement was a key motivating factor behind producing this statement.
	The Government also hope this statement and the C&AG's audit opinion will be helpful to the European Court of Auditors and the Commission when they are performing their own audits and controls; and that the statement and the C&AG's audit opinion will encourage similar initiatives from other EU member states, whose contributions to improving financial reporting and management across the EU are also important.

ECOFIN (1-2 October 2009)

Alistair Darling: The informal Economic and Financial Affairs Council (ECOFIN) was held in Gothenburg on 1-2 October 2009.
	The Informal began with a discussion of the design of exit strategies from fiscal support measures to European economies. Ministers agreed that design of such a strategy was essential for planning for the future, although emphasised that recovery is still fragile and full implementation of the current support measures must continue. Ministers then held a general discussion on the economic and financial situation, including an assessment of the outcomes of the Pittsburgh G20 summit. ECOFIN also held a first round of views on the Commission's draft legislation proposals for reform of financial supervision and regulation in the EU.
	The Informal Council then considered the issues around the financing of climate change in preparation for the United Nations framework convention on climate change (UNFCCC) in Copenhagen in December. The October ECOFIN and European Council will consider this issue further in preparing the EU's input into the UNFCCC. Finally, Ministers addressed the challenges facing European labour markets.

DEFENCE

Afghanistan Force Composition

Bob Ainsworth: Further to my right hon. Friend the Prime Minister's statement on Afghanistan on 14 October 2009, Official Report, columns 299-303, I can announce that, in addition to those units named in my written ministerial statement of 15 July 2009, Official Report, column 24WS on the roulement of 19 Light Brigade by 11 Light Brigade, the following units will deploy to Afghanistan:
	1st Battalion Coldstream Guards, which will now deploy as a complete unit;
	Elements of 30 Signal Regiment;
	Elements of 2nd Battalion The Duke of Lancaster's Regiment (King's, Lancashire and Border);
	Elements of 1st Battalion The Royal Anglian Regiment.
	The deployment of these units will allow us to uplift our force levels to 9,000 troops on an enduring basis.
	As the Prime Minister explained in his statement, UK force levels will be further increased to 9,500 troops if certain conditions are met. This uplift would be provided by the deployment of 1st Battalion The Royal Welsh (The Royal Welch Fusiliers).

Defence Acquisition (Independent Review)

Bob Ainsworth: In December 2008, my predecessor, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), asked Bernard Gray to undertake a review to identify improvements that we could make in the acquisition of defence equipment. I am today publishing Mr. Gray's report and placing a copy in the Library of the House. I am very grateful to Bernard Gray for the effort he has devoted to this, the analysis he has produced, and for his support in developing with my Department proposals to implement many of his recommendations.
	This is not a new issue. As Bernard Gray's report highlights, all countries with significant defence capabilities face the same inherent complexities of military acquisition and-over many decades-have had to deal with cost and time over-runs. Indeed, as the report says, many of our allies are complimentary about the UK's efforts to drive reform in this area and model their systems on ours.
	In the last 12 years, we have implemented a succession of initiatives to improve acquisition processes, including "Smart Acquisition", the defence industrial strategy and more recently the defence acquisition change programme. These have had a significant impact on performance, as the National Audit Office has recognised in successive reports. At its best, my Department's project management is very good indeed. As the report observes, there are dedicated people at all levels in the Ministry of Defence, and among our suppliers, with a strong commitment to ensure the services have the equipment they need to deliver success on current operations and in the future. The system works best when the need is most urgent. We have successfully provided £4.1 billion worth of equipment to theatre in Iraq and Afghanistan through urgent operational requirements since operations began. Our people, military and civilian, can be proud of that achievement. And the service chiefs have made clear that our service personnel are never asked to undertake missions unless we are fully satisfied that they have the right equipment to do the job.
	However, the Gray report also brings out, through analysis of a sample of individual projects, the problems which still persist. These include not only the tendency of programmes to cost more and take longer to deliver than was initially estimated, but the further cost growth to which this gives rise and the pressure it places on limited resources-even in a period when the defence budget as a whole has grown substantially in real terms. It points to remaining skills gaps and to shortcomings in the existing arrangements for managing the equipment programme. And it argues for regular defence reviews to provide a strategic context for decisions on the equipment programme.
	To some extent the difficulties we and others face in estimating the cost and time to deliver projects reflect the fact that much modern defence equipment is at the leading edge of technology and is constantly having to adapt to meet evolving military requirements. Providing our armed forces with the best involves a degree of technological risk and uncertainty. But there are steps we can and must take, in the light of the Gray report, to build on earlier reform and deliver a radical improvement in performance.
	First, I have already announced that we will undertake a strategic defence review immediately after the general election. Preparatory work is already underway, and I intend to publish a Green Paper early in the new year. We will also examine legislative frameworks for implementing Bernard Gray's recommendation that a strategic defence review be conducted early in the term of each new Parliament.
	Secondly, we will work to adjust our equipment programme to bring it into balance with future requirements and the likely availability of resources, through the current planning round and in due course the strategic defence review.
	Thirdly, we will plan equipment expenditure to a longer time frame, with a 10-year indicative planning horizon for equipment spending agreed with the Treasury, and will increase transparency by publishing that planning horizon and an annual assessment of the affordability of our programme.
	Fourthly, we have already strengthened board-level governance within the Ministry of Defence by establishing a new sub-committee of the defence board, as recommended by Mr. Gray, chaired by the permanent secretary as accounting officer and charged with determining, for agreement by the board and Ministers, an equipment plan that is aligned with strategy, affordable and realistic.
	Fifthly, we will improve the way we cost projects in the equipment plan, using better and more sophisticated techniques applied more consistently, and ensuring that investment decisions are based on the most reliable available forecasts. We will also improve the management of risk across the programme.
	Sixthly, we will introduce stronger controls over the entry of new projects into the equipment programme, and over changes in performance, cost and timing of individual projects.
	Seventhly, we will sharpen the business relationship between Ministry of Defence head office, the Defence Equipment and Support (DE&S) organisation, and the service commands, by further clarifying roles and responsibilities, and by establishing new arrangements to provide greater visibility of project management costs in DE&S to the Capability Sponsor in head office.
	Finally, we will accelerate the improvement of key skills (including in cost forecasting and programme management) in DE&S and the Ministry of Defence head office.
	All of these changes are consistent with Bernard Gray's main recommendations. I do not intend to take up his suggestion to establish DE&S as a Government-owned, contractor-operated entity, to put it more at arm's length from the rest of the Ministry of Defence. The Government have thought about this carefully, but we are not convinced that such a change would ultimately lead to better outcomes for the armed forces or defence generally. Having the DE&S as fully part of defence ensures a close working relationship with the military. Equipment acquisition is core business for my Department, and we have to get it right.
	Based on these proposals, I intend to publish a wider, more detailed strategy for acquisition reform in the new year, to contribute to work on the strategic defence review. I am delighted that Bernard Gray has agreed to work with us on this.

JUSTICE

Data Protection Act 1998

Michael Wills: I am today publishing a consultation paper on introducing custodial penalties for offences related to obtaining, disclosing, or selling personal data committed under section 55 of the Data Protection Act 1998. The Government are particularly seeking views from the Information Commissioner and media organisations, but responses to the consultation are welcome from anyone with an interest. The proposals will potentially affect sentencing in England, Wales, Scotland and Northern Ireland, so this consultation is UK wide.
	The Information Commissioner's office has been monitoring the illegal trade in personal data since 2006, when the then Information Commissioner made his report to Parliament "What Price Privacy? The unlawful trade in confidential personal information". The present Information Commissioner called on the Government in September to introduce custodial sentences for offences committed under section 55, which were provided for by the Criminal Justice and Immigration Act 2008. The Government hope that this consultation exercise will reveal the present extent of the illegal trade in personal data.
	At the same time, the Government have no intention of curtailing responsible investigative journalism, so we are also consulting on commencing the new defence under section 55 for those who can show that they acted for the purposes of journalism, art and literature with a view to publishing journalistic, literary or artistic material, in the reasonable belief that the obtaining, disclosing or procuring was in the public interest.
	The Government are committed to increasing the public's confidence in the way personal data are handled. If responses to this consultation demonstrate the need, we will bring forward an order to introduce custodial sentences for the unlawful obtaining of personal data.
	Copies of the consultation paper and associated impact assessment will be placed in the Libraries of both Houses and on the Department's website at: www.justice.gov.uk

Royal Prerogative

Michael Wills: The report of the Government's review of the royal prerogative is published today. This follows the commitment made in the 'Governance of Britain' Green Paper to undertake a wider review of the remaining prerogative executive powers and to consider whether, in the longer term, these powers should be codified and put on a statutory basis. The review was carried out as part of the Government's constitutional reforms to rebalance power between the people, Parliament and Government, by restricting the power of the executive. The reforms are designed to give the people, through Parliament, a greater ability to hold Government to account.
	The internal scoping exercise presaged in the 'Governance of Britain' White Paper has made it possible for the Government to publish, for the first time, a consolidated list of prerogative powers, as identified by Government Departments. The list is annexed to the report. Copies of the report, "Review of the Executive Royal Prerogative Powers: Final Report", have been placed in the Libraries of both Houses, the Vote Office and the Printed Paper Office.
	As well as identifying the main prerogative powers available to Government Ministers, the report summarises the reforms already made or in train as part of the Government's programme of constitutional reform. It enumerates changes already made with regard to honours nominations, senior public and Church appointments. It lists important reforms to some of the main prerogative powers, concerning the ratification of treaties and the organisation of the civil service, which are included in the Government's Constitutional Reform and Governance Bill.
	The report also refers to the statement made by my right hon. Friend the Secretary of State for Justice and Lord Chancellor, when he introduced that Bill to the House on 20 July, and it repeats the Government's commitment to lay before the House later this year a draft of a detailed resolution setting out procedures to approve any deployment of the armed forces in armed conflict overseas.
	Having set the scene, the report assesses the case for replacing or amending other prerogative powers and explains in detail why the Government have concluded that additional legislation is not warranted in most areas. However, when announcing that Michael Shields had been granted a free pardon on 9 September 2009, my right hon. Friend the Secretary of State for Justice and Lord Chancellor indicated that he would review the way in which applications for free pardons would be handled in the future.
	In line with these conclusions, the report's format is not that of a formal consultation paper; nevertheless comments are welcome and the report requests these by 8 January 2010.

TRANSPORT

EU Transport Council

Sadiq Khan: I attended the first Transport Council of the Swedish presidency, in Luxembourg on 9 October.
	There was a policy debate on the Commission's Communication "A sustainable future for transport: Towards an integrated, technology-led and user friendly system", which identifies trends, challenges, and policy objectives and is intended as a consultation document for transport policy over the next 10 years, feeding into the next White Paper in 2010. All member states intervened, many of them drawing attention to the need to support recovery from the current economic crisis while still tackling climate change. The UK was among member states which called for simplification of rules and better integration of policy. We also identified the biggest challenge facing transport as reducing CO2 emissions, while supporting economic prosperity. Implementation of existing policies was critical, and technology must be used to contribute to clearly defined goals.
	The Council agreed a complementary negotiating mandate for the negotiation of a road transport agreement between the EU and the Western Balkan partners. This was supplementary to the earlier and principal mandate adopted on 12 June 2008. The presidency expressed the hope that the negotiations would be completed before the end of the year. The road transport negotiating mandate is acceptable to the UK. We entered a statement in the minutes, welcoming the work done on this agreement, which will facilitate market integration between the Western Balkans and the EU, and noting that the granting of this mandate for the Commission to negotiate with the Western Balkan partners does not affect the existing division of competence between the community and the member states.
	The Council reached a political agreement on a regulation on the rights of passengers when travelling by sea and inland waterway. The proposal seeks to provide new rights to passengers with reduced mobility and to enhance general passenger rights, while not adding significant burdens to industry, in particular SMEs. The agreed text of the regulation was acceptable to the UK.
	There was a progress report on a proposed directive on reporting formalities for ships arriving in and/or departing from ports of the member states. This amending directive aims to ease administrative burdens on international shipping operating within the community, an aim which we support. The presidency will start negotiations with the European Parliament with a view to reaching a First Reading agreement.
	Council agreed to a decision to enable Norway and Iceland to join the EU-US air transport agreement, noting the market-opening benefits. This decision will be finalised by formal adoption at a future Council. The UK supports the decision.
	The Council adopted two decisions authorising the Commission to open negotiations with Brazil for an agreement on aviation safety issues and negotiations with the US on a memorandum of co-operation in civil aviation research and development. The UK supports both negotiating mandates.
	Under AOB, the Commissioner spoke on the carriage of liquids in hand luggage at EU airports and a possible way to proceed in April 2010, when the current restrictions are due to expire. He then gave details of his three step transitional proposal. This involves alleviations for third country transfer passengers, potentially from next April, and then introduction of technological checks by 2012 in large airports and by 2014 for smaller airports. This was the first opportunity for EU Transport Ministers to collectively consider the Commissioner's proposal. I was one of many Ministers strongly supporting an extension of the existing liquids restrictions after April 2010, until such a time as technological solutions which provide robust detection performance and a better passenger experience are ready for deployment. We are keen to move from the current restriction-based system to one using new screening technologies but only when we are convinced that they can meet the challenge of ensuring the utmost levels of security for passengers, while striving to improve their air travel experience. Aviation security experts will now consider the detail of the Commission proposal, which will then be subject to the regulatory procedure with scrutiny (by the European Parliament). DfT Ministers will be writing to the Lords and Commons Scrutiny Committees shortly.
	Also under AOB, the presidency and Commission reported on the EGNOS and Galileo satellite navigation programmes. They declared that the EGNOS (European geostationary navigation overlay system) signal, which improves the accuracy of GPS, had officially started operations on 1 October. On Galileo, the Commission said that it plans to have all the procurement contracts with suppliers let by the end of 2010, with the first two being let by the end of 2009. It is expected that the first satellite launches will take place in 2012 and that a Galileo service would be available from 2013. The UK is continuing to work with the presidency, the Commission and other member states to progress the Galileo programme and ensure that we remain focussed on meeting this timetable.